What are the fundamental factors that affect whether a business should invest?  

Expert Answers

An illustration of the letter 'A' in a speech bubbles

For a business, investment is defined as buying capital goods -- goods that will be used to produce other goods.  So this would be like a business buying a new machine.

The most basic fundamental factor to consider is whether the machine will earn you more revenue than it costs you to buy it.

In order to figure this out, a business must try to predice such things as tax rates, interest ratesm, and the prices that they will have to pay for inputs and that they can charge for outputs.

Approved by eNotes Editorial Team